Slower auto sales caused KAR Auction Services Inc. to fall short of Wall Street’s third-quarter expectations, the Carmel-based company announced Thursday morning.
The company also lowered its profit forecast for the year.
KAR, which operates Adesa auto auction facilities, had net income of $32.2 million in the three months ended Sept. 30, a 26-percent increase from the same quarter a year earlier.
But, after accounting adjustments, the company suffered a 16-percent decline in its adjusted earnings, from $38.6 million in the third quarter last year to $32.4 million this year.
On a per-share basis, KAR’s adjusted profit slid from 28 cents in the third quarter a year ago to 23 cents this year. Wall Street analysts surveyed by Thomson Reuters expected KAR to earn 28 cents per share.
The big culprit was auto auction sales, which fell nearly 10 percent, to $241.3 million. KAR’s overall revenue, which also includes results of its auto salvage and dealer financing operations, totaled $447 million, up slightly from a year earlier.
Analysts were expecting revenue of nearly $455 million, according to Thomson Reuters.
KAR dropped its full-year profit forecast, excluding accounting items, to $1.18 to $1.20 per share. In August, the company predicted adjusted profit of $1.20 to $1.25 per share.
The accounting charges KAR excludes are for excess depreciation and amortization, as well as stock compensation for executives, which are the result of the 2007 purchase of the company by a group of private equity firms.